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"The survey shows that if given the chance, many Americans would have spent differently on short-term pleasures, especially compared to spending that supports their families’ long-term happiness and success"

SAN FRANCISCO--(BUSINESS WIRE)--New research from Schwab Retirement Plan Services, Inc. reveals that,
despite having a positive outlook for retirement, American workers
regret past spending and are concerned about being able to ultimately
save enough for their golden years. The nationwide survey of 1,000
401(k) plan participants finds that while 70 percent believe their
quality of life in retirement will be better than that of both their
parents and their children, saving for retirement is still their number
one source of financial stress (40%).

Paying for unexpected expenses (40%), being unwilling to sacrifice
things that improve their quality of life (34%) and paying down credit
card debt (31%) top the list of obstacles participants face when trying
to save for retirement in the present. Moreover, two-thirds of
participants (64%) wish they had spent less in the past to save more for
retirement, particularly on meals out, expensive clothing, new cars and
vacations. Conversely, participants are less likely to regret past
spending on more enduring and significant items such as housing,
weddings, student loans and tuition for their children.

According to the survey, respondents are relying heavily on their
workplace retirement plans to help them meet their long-term goals, with
62 percent saying they expect their 401(k) to be their largest source of
retirement income. Outside of a 401(k), however, participants may be
missing out on opportunities to grow their nest eggs. The survey finds
that, beyond their 401(k), participants are more likely to use a savings
account to prepare for retirement than they are an IRA or other
investment vehicle.

“The survey shows that if given the chance, many Americans would have
spent differently on short-term pleasures, especially compared to
spending that supports their families’ long-term happiness and success,”
said Steve
Anderson, president, Schwab
Retirement Plan Services, Inc. “Moreover, participants understand
the value of their 401(k)s and the importance of saving for retirement,
but the findings suggest that they need guidance to prioritize their
financial obligations and make the most of their assets. While there may
be hurdles along the way, having a written financial plan can help
workers make decisions today with an eye towards the future.”

A Little Help Goes a Long Way

As they plan for the years ahead, respondents recognize the role of a
401(k) in helping them achieve a comfortable retirement, with 88 percent
saying a 401(k) is a “must-have” benefit and 90 percent saying they
would think twice before accepting a job that didn’t offer one. The
survey also reveals that many participants are taking proactive steps to
try to meet their retirement goals, as 65 percent have increased their
401(k) contribution level in the past two years, and 80 percent believe
their 401(k) is in better shape today than ever before.

Though most participants (72%) say they feel on top of their 401(k)
investments, many still think they would benefit from professional help.
According to the survey:

Half (50%) of respondents are extremely/very confident in their
ability to make the right 401(k) investment decisions on their own,
but;

77 percent would feel that level of confidence if they had the help of
a financial professional; and

52 percent would expect better investment performance with
professional advice.

Participants clearly recognize the value of advice, but there is a gap
between what they say they desire and what they feel they deserve. While
the majority (71%) would like personalized investment advice specific to
their 401(k), only about half (53%) believe that their current financial
situation actually warrants professional help. And while most (73%)
think they know what percentage of their salary they should save in a
401(k), just over half (54%) say they know how much money they actually
need to accumulate for a comfortable retirement.

“401(k) savers definitely have the right idea but could use help with
the particulars,” added Catherine
Golladay, senior vice president, 401(k) Participant Services and
Administration at Schwab Retirement Plan Services. “The good news is
that many 401(k) plans today offer investment advice, and that advice
isn’t meant just for the affluent. It’s meant for everyone. No matter
how much money you have to save and invest, a professional can help you
maximize its potential.”

Workplace Financial Wellness for the Present and Future

The 401(k) participants surveyed are, by and large, staying on top of
their finances, with most (72%) reporting that they have some money left
at the end of the month after they’ve paid their bills. But respondents
may be missing out on opportunities to grow their assets: only one-fifth
either put that extra money towards their 401(k) or invest it in the
markets (19% and 21%, respectively).

Participating in a workplace financial wellness program can help
employees understand how to put their money to work for them, ultimately
helping to alleviate financial stress. According to the survey,
participants would be highly likely to take advantage of resources at
work, including online tools to help plan for retirement (88%) and help
from a financial professional to develop a financial plan (77%).

Respondents also named the areas of retirement planning with which they
would most like assistance:

Calculating how much money to save for retirement (43%);

Receiving specific advice on how to invest their 401(k) (39%);

Determining at what age they can afford to retire (39%);

Figuring out what their expenses will be in retirement (36%).

“Employers have the opportunity to help their workers by offering
financial wellness programs that provide guidance on some of the harder
questions individuals face as they manage their day-to-day finances
while saving for retirement. Unfortunately, only about half of the
people we surveyed have access to this type of program,” Anderson
stated. “Employers should consider how these value-added programs can
strengthen their workplace benefits offering. Financial wellness
programs are a true win-win: not only can they help to alleviate the
stress employees feel about retiring with enough savings, but they can
also increase employee engagement and foster loyalty.”

About the Survey

This online survey of U.S. 401(k) participants was conducted by Logica
Research (formerly Koski Research) for Schwab Retirement Plan Services,
Inc. Logica Research is neither affiliated with, nor employed by, Schwab
Retirement Plan Services, Inc. The survey is based on 1,000 interviews
and has a 3 percent margin of error at the 95 percent confidence
level. Survey respondents worked for companies with at least 25
employees, were current contributors to their 401(k) plans and were
25-70 years old. Survey respondents were not asked to indicate whether
they had 401(k) accounts with Schwab Retirement Plan Services, Inc. All
data is self-reported by study participants and is not verified or
validated. Respondents participated in the study between May 3 and May
16, 2018.

At Charles Schwab we believe in the power of investing to help
individuals create a better tomorrow. We have a history of challenging
the status quo in our industry, innovating in ways that benefit
investors and the advisors and employers who serve them, and championing
our clients’ goals with passion and integrity.

The Charles Schwab Corporation provides services to retirement and other
benefit plans and participants through its separate but affiliated
companies and subsidiaries: Charles Schwab Bank; Charles Schwab & Co.,
Inc.; and Schwab Retirement Plan Services, Inc. Trust, custody, and
deposit products and services are available through Charles Schwab Bank.
Schwab Retirement Plan Services, Inc. is not a fiduciary to retirement
plans or participants and only provides recordkeeping and related
services.(0818-8BHW)